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Rich Tehrani

[February 4, 2004]

The Future Of IP Telephony: A Panel Discussion At INTERNET TELEPHONY Conference & EXPO



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Panelist Barry Zipp of MCI answers our questions:

Q. IP Telephony's market share is increasing. What are your predictions for continued growth of IP Telephony in the Enterprise space? What about in the service provider space?

A. The pace at which IP telephony has developed from both a technological and end user acceptance standpoint has been remarkable. Much of the growth has been based on cost savings.  However, we expect features and applications enabled through the convergence of voice and data on a converged IP infrastructure will further accelerate IP technology expansion.  Applications such as messaging, conferencing, and contact center services will take on an increased significance for VoIP.

IP contact centers in particular represent a significant market opportunity in the IP Telephony space.  Features such as blended media (voice, instant messaging, email, fax, and video), co-browsing, presence management, and click-to-talk applications will continue to be the most prominent enhanced applications.  Other applications like network-based call waiting and virtual second line applications will enable even more enhanced remote agent capabilities.

Service providers today are faced with a set of formidable challenges: how to grow revenues and attract new customers while working within reduced capital budgets. Hosted voice (ie: IP Centrex or hosted PBX services) will enable service providers to realize both objectives.  There is a huge market opportunity in hosted voice.  Studies in the SMB space have shown that most companies will outsource their services to a carrier if it enables them to scale affordably and reduces their need to manage CPE. 

Because one size does not fit all, carriers will have to be able to support both premises-based and hosted solutions, thereby enabling customized solutions for all size customers.  Ultimately, providers that educate, inform and provide pragmatic solutions will be most likely to gain the trust and business of enterprise customers.

Q. How do IP Telephony systems compare to legacy systems on a cost basis? Does it make financial sense to move from legacy systems to IP telephony? And what of the "soft" cost savings (productivity, ease of use)...? What impact does that have on the decision to adopt new technology?

A. The primary driver for IP Telephony has consistently been cost savings. Enterprises are realizing savings in transport usage, access, moves/adds, equipment, and cabling. IP Telephony also provides significant soft cost savings.  The technology promotes staffing savings by combining IT and Telecom staffs.  It boosts employee productivity with enhanced applications such as unified communication management, collaborative tools, and remote employee applications.  Equally important, the technology enables the enterprise to quickly adapt to changing business conditions by adding/removing users, quickly modifying auto-attendants, voicemail platforms etc.

Hosted solutions in particular deliver even greater efficiencies by enabling enterprises to realize the benefits of next generation features and services without the hassle and expense of managing CPE.  They also provide a more economical means to connect a distributed workforce with remote agent capabilities.

Both hard and soft cost savings should be included as part of the enterprise�s TCO analysis when contemplating an IP Telephony deployment.

Q.  What are some of the specific steps the industry needs to take in order to ensure continued growth and user adoption of IP Telephony? What are some potential pitfalls and how should they be avoided?

A. Despite a rocky start, IP telephony has now evolved into a technology that delivers the features, scalability, and reliability that enterprises have come to expect in legacy systems. Technology performance is therefore a key factor we all need to keep an eye on.  While enterprises are looking to the technology as way to save money and increase efficiencies, they won�t adopt it if the performance adversely affects their ability to do business.

We should also continue to research and identify a wide and deep suite of high-value applications that enable businesses to do business better.   Features and services should be packaged and competitively priced to realistically meet customer requirements. The technology should deliver business enhancing capabilities that create efficiencies and simplify customer business processes.

In the hosted IP voice space, it is critical that providers offer reliable service and responsive customer service; otherwise customers may find they are better served managing their own CPE.

Lastly, as the IP Telephony marketplace evolves so may the legal and regulatory landscape.

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Rich Tehrani is TMC's president. He welcomes your comments. Participate in our forums.

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